Breakage

[RXB]

In Canada, all it would take is a single legislative stroke from one government (federal) to adopt penny breakage instead of nickel breakage. There's no legitimate reason to maintain nickel breakage; the fact that it does remain is the clearest sign of apathy/contempt toward bettors by the industry and its regulators.

The advertised takeout rates on WPS, especially show are utterly misleading with nickel breakage. For most Americans who face dime breakage it's doubly ridiculous. Why is this practice still permitted? Because they don't mind being outright untruthful to the bettors, that's why. It's considered perfectly acceptable in the horse racing world, by industry people and regulators alike.

[Stillriledup]

If the guy in Office Space steals a penny here or there, it's a crime, if the racetrack does it, they call it breakage.

People with adw accounts shouldn't pay breakage as they aren't 'holding up betting lines' so there's no need to round down their payoffs.

[cj]

In Canada, all it would take is a single legislative stroke from one government (federal) to adopt penny breakage instead of nickel breakage. There's no legitimate reason to maintain nickel breakage; the fact that it does remain is the clearest sign of apathy/contempt toward bettors by the industry and its regulators.

The advertised takeout rates on WPS, especially show are utterly misleading with nickel breakage. For most Americans who face dime breakage it's doubly ridiculous. Why is this practice still permitted? Because they don't mind being outright untruthful to the bettors, that's why. It's considered perfectly acceptable in the horse racing world, by industry people and regulators alike.

I agree with you about breakage. But I would say breakage on average adds about 1% to takeout in the win pool. It isn't "that" misleading. But as you say, it should be penny everywhere.

[lamboguy]

if a horse is supposed to pay $2.39, the breakage drops it down to $2.20. that happens all day long in place and show pools.

[cj]

if a horse is supposed to pay $2.39, the breakage drops it down to $2.20. that happens all day long in place and show pools.

Right, obviously the amount of breakage is price dependent.

[RXB]

if a horse is supposed to pay $2.39, the breakage drops it down to $2.20. that happens all day long in place and show pools.

That's right.

NYRA's CEO got fired because of 1%. And 1% of $100,000 is a grand. On place and show, it becomes much worse than 1%. This dishonesty is treated like no big deal, and the practice exists in a world where the old excuse for breakage has no legitimacy whatsoever.

If the tracks want to maintain their actual WPS takeout, make them be honest and reset it with penny breakage factored in, and actually pay out something very close to what the bet should actually pay according to the published rates. It's incredible that this BS is legal. Not just permitted off the cuff, but actually maintained by legislative fiat.

[Rise Over Run]

#BreakageMatters

[ronsmac]

In Canada, all it would take is a single legislative stroke from one government (federal) to adopt penny breakage instead of nickel breakage. There's no legitimate reason to maintain nickel breakage; the fact that it does remain is the clearest sign of apathy/contempt toward bettors by the industry and its regulators.

The advertised takeout rates on WPS, especially show are utterly misleading with nickel breakage. For most Americans who face dime breakage it's doubly ridiculous. Why is this practice still permitted? Because they don't mind being outright untruthful to the bettors, that's why. It's considered perfectly acceptable in the horse racing world, by industry people and regulators alike.Breakage went from a nickel to a dime in the first place to raise more revenue. It's allowed because the people in power don't care and like the millions in hidden revenue.

[Fox]

I agree with you about breakage. But I would say breakage on average adds about 1% to takeout in the win pool. It isn't "that" misleading. But as you say, it should be penny everywhere.

I'd rather they eliminate breakage and increase takeout 1% then.

[Robert Goren]

The biggest argument against going to a penny breakage is the tellers would have deal with penny coins. If you ever been part of business that has done that, you know it is a problem. One the first rules of business is that you want to make things as simple as possible for lowest paid employees. That said I am in favor of penny breakage, but going to it will not save racing. Racing has far bigger problems. The breakage issue is a distraction from those bigger issues.

[rastajenk]

Or, one could say that racing is ahead of the curve in the movement to eliminate pennies. (https://en.wikipedia.org/wiki/Penny_debate_in_the_United_States) :cool:

[RXB]

The biggest argument against going to a penny breakage is the tellers would have deal with penny coins. If you ever been part of business that has done that, you know it is a problem. One the first rules of business is that you want to make things as simple as possible for lowest paid employees. That said I am in favor of penny breakage, but going to it will not save racing. Racing has far bigger problems. The breakage issue is a distraction from those bigger issues.

In Canada, we no longer have a penny coin. Any cash transaction is rounded to the nearest nickel. The same thing could be done by racetracks in the US. And fractional bets like dime superfectas pay to the penny already, so what would be the difference with the modest number of tiny cash WPS bets? This isn't 1950; a couple of pennies means nothing, and the vast majority of the handle is done online or through machines anyway.

And just because racing has other problems, you're using that as an excuse not to deal with this one? Whatever.

[thaskalos]

The biggest argument against going to a penny breakage is the tellers would have deal with penny coins. If you ever been part of business that has done that, you know it is a problem. One the first rules of business is that you want to make things as simple as possible for lowest paid employees. That said I am in favor of penny breakage, but going to it will not save racing. Racing has far bigger problems. The breakage issue is a distraction from those bigger issues.
Eliminate the breakage...and the players would gladly let the tellers keep the odd pennies as a tip.

[biggestal99]

In Canada, we no longer have a penny coin. Any cash transaction is rounded to the nearest nickel.

so there are no $19.99 sales; they are actually 20 bucks.

The stores must happy.

Allan

[MonmouthParkJoe]

Ive studied this extensively this last year.

Conservatively, breakage represents .5% of overall handle. Do the math, $10.5 billion in handle each year, comes out to over $50 million that is systematically robbed from us.

I am sure there were reasons back when parimutuel racing started, but we pay to the penny in superfectas, why not pay to the penny in all bets?

Most wagering done is through an ADW, or self service machine. The idea that lines would be held up is ridiculous, most tracks are dead even on the weekends. If tellers take the time to make change such a nickles, dimes, and quarters, how much longer would it take to make penny change?

It is absurd to think this continues. Add breakage to the already high takeouts, and you are even further behind the 8 ball.

I cant ever see this being eliminated since the states have been getting it for so long. Its sad when I think about how much has been taken from myself over the last 15 years.

The only added benefit is additional churn, but it only benefits the track they are wagering on. taking this added money and wagering on another track in another state benefits that track, not the track you are wagering from.

[RXB]

so there are no $19.99 sales; they are actually 20 bucks.

The stores must happy.

Allan

Yeah, I'm sure they're just raking it in with that extra penny. Especially since I see so many people paying with cash these days.

[RXB]

Ive studied this extensively this last year.

Conservatively, breakage represents .5% of overall handle. Do the math, $10.5 billion in handle each year, comes out to over $50 million that is systematically robbed from us.

I am sure there were reasons back when parimutuel racing started, but we pay to the penny in superfectas, why not pay to the penny in all bets?

Most wagering done is through an ADW, or self service machine. The idea that lines would be held up is ridiculous, most tracks are dead even on the weekends. If tellers take the time to make change such a nickles, dimes, and quarters, how much longer would it take to make penny change?

It is absurd to think this continues. Add breakage to the already high takeouts, and you are even further behind the 8 ball.

I cant ever see this being eliminated since the states have been getting it for so long. Its sad when I think about how much has been taken from myself over the last 15 years.

The only added benefit is additional churn, but it only benefits the track they are wagering on. taking this added money and wagering on another track in another state benefits that track, not the track you are wagering from.

The whole practice is absurd and it's dishonest. A .10 superfecta pays $1,032.14 and you get that exact amount. A $200 straight bet that should pay $279.90, you get $260 after dime breakage, $270 after nickel breakage.

I don't even really agree with penny breakage in the sense that it shouldn't be automatically rounded down. It should be rounded to the nearest penny, up or down.

[Stillriledup]

The whole practice is absurd and it's dishonest. A .10 superfecta pays $1,032.14 and you get that exact amount. A $200 straight bet that should pay $279.90, you get $260 after dime breakage, $270 after nickel breakage.

I don't even really agree with penny breakage in the sense that it shouldn't be automatically rounded down. It should be rounded to the nearest penny, up or down.

The 'funniest' thing about that penny super is it was also rounded down first!! If the super was supposed to pay 100.19 they round 9 cents off the price and then you get your 'penny' if have it for a dime.

[lamboguy]

The 'funniest' thing about that penny super is it was also rounded down first!! If the super was supposed to pay 100.19 they round 9 cents off the price and then you get your 'penny' if have it for a dime.breakage in super's are more than penny's, they are usually dollars, and sometimes many dollars.

[Stillriledup]

breakage in super's are more than penny's, they are usually dollars, and sometimes many dollars.

They are?

So if a super is supposed to pay 184.80 they sometimes round it down to 180 or 175?

[cj]

They are?

So if a super is supposed to pay 184.80 they sometimes round it down to 180 or 175?

I don't know about all tracks, but at NYRA breakage is to the $1 on payoffs $500 or more.

[RXB]

The effects of breakage to the nearest dollar on large payouts is relatively small, although even that type of rounding shouldn't happen. Dime breakage on low payouts is far, far from trivial-- can exceed 8% off of what should be paid.

Imagine if an employee earned $299 and the company rounded it down to $280. "Well, Fred, I know we said you earned $14.95 per hour but that's before our company breakage, which takes you down to $14 per hour." That's the same effect as dime breakage-- and now imagine if the government wrote a law that said a company could post a wage rate but then round the actual earned wage downward to the next dime for every $1 earned. Yeah, right.

Somehow in the racing world this is considered acceptable practice. I really don't see how it could hold up under a legal challenge.

[Stillriledup]

I don't know about all tracks, but at NYRA breakage is to the $1 on payoffs $500 or more.

Interesting, didnt realize it. Amazing that they're allowed to just skim a buck or two off the price like that.

[EMD4ME]

Interesting, didnt realize it. Amazing that they're allowed to just skim a buck or two off the price like that.

In return for .10 breakage for smaller payoffs, the tradeoff was $1 breakage for larger payouts.

The thinking being that people bet $2,000 to win and the .10 helps.

If I hit a $4,000 super. Odds are I have it for a buck and don't miss the .80 cents that I might lose.

[cj]

In return for .10 breakage for smaller payoffs, the tradeoff was $1 breakage for larger payouts.

The thinking being that people bet $2,000 to win and the .10 helps.

If I hit a $4,000 super. Odds are I have it for a buck and don't miss the .80 cents that I might lose.

For the record I didn't post it like it was a bad thing. It is minuscule and hardly worth mentioning. I was just pointing out why lambo said what he did. (i think)

[EMD4ME]

For the record I didn't post it like it was a bad thing. It is minuscule and hardly worth mentioning. I was just pointing out why lambo said what he did. (i think)

I figured that CJ. I just wanted to explain what I remember to be the reason(s) to SRU.

A bit off topic. I remember in 2002, NYRA used to advertise that NYRA has given back an extra XXXXXXXXXXXXXXX in real dollars to bettors by having WPS takeout at 15%. Lowest in the nation.

Wish those days would come back. (meaning a focus on how good for the game lower takeout and dime breakage is)

[Stillriledup]

In return for .10 breakage for smaller payoffs, the tradeoff was $1 breakage for larger payouts.

The thinking being that people bet $2,000 to win and the .10 helps.

If I hit a $4,000 super. Odds are I have it for a buck and don't miss the .80 cents that I might lose.

The trade off?

So they steal some money on WPS bets and steal more money on larger bets? Seems like a win win.

[cj]

The trade off?

So they steal some money on WPS bets and steal more money on larger bets? Seems like a win win.

They take much less in breakage from the big payoffs. The bigger the payoff, the fewer people hitting them.

[Stillriledup]

They take much less in breakage from the big payoffs. The bigger the payoff, the fewer people hitting them.

Good point.